Symantec 2008 Annual Report Download - page 162

In August 2007, the FASB issued proposed FASB “FSP” No. APB 14-a, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). The proposed FSP
would require the issuer of convertible debt instruments with cash settlement features to separately account for the
liability and equity components of the instrument. The debt would be recognized at the present value of its cash
flows discounted using the issuer’s nonconvertible debt borrowing rate at the time of issuance. The equity
component would be recognized as the difference between the proceeds from the issuance of the note and the fair
value of the liability. The proposed FSP would also require an accretion of the resultant debt discount over the
expected life of the debt. The proposed transition guidance requires retrospective application to all periods
presented, and does not grandfather existing instruments. In March 2008, the FASB approved moving the proposed
FSP to final guidance. The final guidance will be effective for fiscal years beginning after December 15, 2008, and
interim periods within those years. Entities will be required to apply guidance retrospectively for all periods
presented. If the FSP is issued as proposed, we expect the increase in non-cash interest expense recognized on our
consolidated financial statements to be significant.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities, including an amendment of SFAS No. 115. SFAS No. 159 permits companies to choose to measure
certain financial instruments and certain other items at fair value and requires unrealized gains and losses on items
for which the fair value option has been elected to be reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. We are currently in the process of evaluating the impact of SFAS No. 159 on
our consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a
framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased
consistency in how fair value determinations are made under various existing accounting standards which permit, or
in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. In February 2008, the FASB issued FSP
No. FAS 157-1, Application of SFAS No. 157 to SFAS No. 13 and Other Accounting Pronouncements That Address
Fair Value Measurements for Purposes of Lease Classification or Measurement under SFAS No. 13 and FSP
No. FAS 157-2, Effective Date of SFAS No. 157. Collectively, the Staff Positions defer the effective date of
SFAS No. 157 to fiscal years beginning after December 15, 2008, for nonfinancial assets and nonfinancial liabilities
except for items that are recognized or disclosed at fair value on a recurring basis at least annually, and amend the
scope of SFAS 157. We are currently evaluating the impact of the pending adoption of SFAS 157 on our
consolidated financial statements.
In September 2006, the FASB issued Emerging Issues Task Force (“EITF”) Issue No. 06-1, Accounting for
Consideration Given by a Service Provider to a Manufacturer or Reseller of Equipment Necessary for an End-
Customer to Receive Service from the Service Provider. EITF Issue No. 06-1 requires that we provide disclosures
regarding the nature of arrangements in which we provide consideration to manufacturers or resellers of equipment
necessary for an end-customer to receive service from us, including the amounts recognized in the Consolidated
Statements of Income. EITF Issue No. 06-1 is effective for fiscal years beginning after June 15, 2007. We do not
expect the adoption of EITF Issue No. 06-1 to have a material impact on our consolidated financial statements.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)